Iphone

Source: Apple.    

This may not seem to be a great time to be an Apple (NASDAQ:AAPL) shareholder. The stock has closed lower in five of the past six months. The shares are currently trading 8.7% lower in December, making it highly likely that we're stretching the string of negative returns to six of the past seven months. 

It's not just a natural rotation out of a tech bellwether. Analysts have been scaling back iPhone sales forecasts for the telltale holiday quarter, and profit targets have also been moving lower. Over the past month we've seen Wall Street income estimates trimmed by roughly $0.10 a share for both fiscal 2016 and fiscal 2017.

Stifel Nicolaus and FBR & Co. became the latest Wall Street pros to slash both their price targets on Apple's stock and the number of iPhones the consumer-tech titan will sell this season.

Remember when Apple was a market darling growing at a heady clip on the top line despite its gargantuan size? Well, analysts see revenue climbing at a mere 3.4% year-over-year rate during the current quarter, decelerating to 1.5% in the March quarter. 

This may make this seem like an odd time to warm up to Apple, but there are also some bullish arguments to be made for opportunistic investors. Let's go over three reasons Apple stock could -- and should -- bounce back in the year ahead.

1. It's been a long time since Apple has been this cheap
It's true that growth at Apple is decelerating, but we're not at the same place we were a couple of years ago when margins were contracting. Analysts still see earnings per share rising 6% this fiscal year and accelerating to nearly 10% in fiscal 2017. That's better than the 4% and 6% top-line growth that Wall Street's forecasting for these next two fiscal years, respectively. 

It's against this backdrop of slowing yet growing bottom-line results that the stock has taken a nearly 20% hit since its springtime peak. You don't need to whip out your calculator app to figure out that a P/E multiple will shrink if a stock price slips as its earnings per share expands. Apple is now fetching just 11 times this new fiscal year's earnings forecast and 10 times next year's target. Back out Apple's meaty and unmatched cash reserves, and that multiple shrinks into the single digits.

2. Income investors are hearing dinner bells
We know what a slumping share price and growing earnings does for a stock's earnings multiple, so let's extend that logic to a shrinking stock price and growing quarterly distributions. Apple stock is currently yielding a little more than 1.9%, higher than it's been in some time.

That may not seem like much of a payout, and it may seem less tempting if interest rates start to inch higher. However, Apple has boosted its rate every year since reinitiating a dividend policy in 2012. We're a couple of months away from another likely hike. That should push the yield north of 2% if the stock marches in place or heads lower. If the stock moves higher, that's the reward in this win-win scenario.

3. Innovation is in Apple's DNA
There's a lot -- too much, actually -- riding on the iPhone. A whopping 66% of Apple's revenue in fiscal 2015 came from the iPhone, and it's widely believed that the iconic smartphone accounts for an even bigger chunk of Apple's profitability.

Things won't always be that way. The Apple Watch may not have materially moved the needle, but give it time (pun not intended). We still also haven't seen what Apple is truly capable in the realms of streaming television, self-driving cars, and full-blown HDTVs. 

Apple is still growing, trading at a forward earnings multiple in the single digits on an enterprise value basis, and yielding nearly 2%. It would be an attractive investment if it wasn't Apple, and it's an even more compelling purchase because it's Apple. 

Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.